Raja arrest kills market mood, Nifty ends with modest gains

Indian equity benchmarks snapped five days losing streak and closed the session with modest gains on Wednesday. It was a short covering rally today that led the Sensex up over 200 points during the day after the sharp sell-off seen in previous five sessions. But that relief rally fizzled out to a major extent in last half an hour of trade, especially could be after former telecom minister A Raja was arrested by CBI in 2G spectrum scam, along with Raja's former personal secretary RK Chandolia & former telecom secretary Siddharth Behura.

Raja has been charged with criminal misconduct, violation of policies and favouring some specific companies during the granting of 2G spectrum licences.

Scams definitely dented our image, says Gaurav Doshi, Vice President, Equity Specialist for PMS, Morgan Stanley Private Wealth Management India. "Investors have clearly changed their attitude that any company that has any sort of remote possibility of any sort of linkages to a scam or associated to any people, foreign money just doesn't want to touch them. Investors are going to become extremely choosy about stocks that they want to stay with and they will dump anything they have, if the thing is slightly suspect like a hot Potato," he said.

Anil Dhirubhai Ambani Group, capital goods, select auto, financial and metal companies' shares erased more than 150 points on the Sensex from day's high. However, Reliance Industries, Bharti, TCS, Tata Motors, Wipro, ICICI Bank, Sterlite, ONGC, HUL and DLF helped the markets to end with moderate gain.

The 30-share BSE Sensex closed at 18,090.62, up just 68.40 points and the 50-share NSE Nifty rose 14.80 points to settle at 5,432, which could not hold the 5450 level in late trade.

The Nifty gained more than 73 points and the Sensex rallied 284 points today to hit an intraday high of 5,490.60 and 18,306, respectively; while respective indices shed 330 points and 1100 points in previous five sessions.